Muscat: Bank credit across the Sultanate surged to RO 34.5 billion by the end of September 2025, an 8% increase, with private sector credit rising to RO 28.2 billion, up 5.7%. Deposits in the banking sector also expanded by 4.7%, reaching RO 33.1 billion, while private sector deposits jumped 7.5% to RO 22.3 billion. Individuals continue to dominate the deposit base with a 50% share, followed by non-financial corporations (30.5%) and financial firms (17.3%).

This growth signals strong private-sector trust, rising demand for financing, and expanding non-oil economic activity. Alongside conventional banking, the Islamic finance sector has gained ground through increased credit and deposits, offering diversified and Sharia-compliant financing tools for investors and SMEs.

SMEs currently account for 3.7% of total loan portfolios, with a national strategy underway to raise the figure to 5%. Authorities aim to achieve this by simplifying credit procedures, reducing collateral demands, and establishing SME-focused units across banks.

International rating agencies have taken note. Standard & Poor’s reaffirmed Oman’s BBB- rating with a stable outlook, while Moody’s upgraded the country to Baa3 investment grade, reflecting robust public finances and a declining debt-to-GDP ratio. These upgrades reinforce global confidence in Oman’s financial stability and debt management strategy.

Sweeping legislative reforms are also shaping the next chapter of Oman’s financial system. The newly issued Banking Law enhances digital banking regulations, prohibits shell banks, strengthens governance, and boosts consumer protection. The establishment of the Financial Services Authority (FSA) has reorganized oversight of the Muscat Stock Exchange (MSX), insurance sector, and accounting and auditing professions.

The FSA’s Capital Market Stimulus Program is a major pillar in this transformation, encouraging family businesses and SMEs to convert into joint-stock companies and list on the MSX. The program offers tax incentives, simplified procedures, and access to long-term financing through equity, bonds, and sukuk.

His Excellency Abdullah bin Salem Al Salmi, Chairman of the FSA, emphasized that the initiative aims to help companies adopt sustainable governance standards, boost transparency, and tap into capital market tools for medium- and long-term growth. He highlighted that capital markets complement the banking sector and are essential for mobilizing national savings to finance economic development.

Beyond capital markets, Oman is seeing tangible expansion in modern financing tools. Crowdfunding platforms have financed 14.9 million OMR in projects since 2022, becoming vital for startups and SMEs seeking alternatives to traditional loans. Meanwhile, electronic payments continue to surge: mobile payment transactions have skyrocketed from fewer than 5 million to 40 million annually in just three years, supported by advanced national payment systems such as RTGS, ECS, and mobile payment platforms.

From the private sector, Mustafa bin Ahmed Salman, Board Member of the Oman Chamber of Commerce and Industry, praised government efforts including the Capital Market Stimulus Program, strengthening of the Development Bank, and establishment of the Oman Investment Bank, the first specialized investment bank in the country. He added that the new Promising Companies Market will simplify listings for SMEs and startups, offering tax, marketing, and operational incentives.

The Oman Chamber continues to align its strategy with Oman Vision 2040, organizing trade delegations and exploring investment opportunities across governorates while easing pathways for foreign investors. Committees within the Chamber are also actively engaged in enhancing legislation, resolving investor challenges, and boosting awareness of financial systems.

Fintech innovation is another rising pillar of the financing ecosystem. Through the regulatory sandbox, technology startups can test digital financial solutions, while the open banking framework allows secure data-sharing and next-generation digital services. Enhancements to the national credit information system via Mala’a Center are improving credit transparency, enabling investors to make informed decisions.